As public and private credit spreads tighten, non-sponsored private credit offers a meaningful premium and diversification potential.
authors
Christopher Bole
Christopher Bole
Vice President, Financial Writer
First lien spreads by loan type (basis points)
Source: Cliffwater, LLC, as of June 30, 2025.
  • Generating attractive real income today is increasingly challenging. Credit spreads are near post-Global Financial Crisis lows, and Fed rate cuts are expected to push yields lower even as inflation remains elevated.
  • Private credit has historically been a solution in such environments, offering both diversification potential and a yield premium.
  • Non-sponsor backed loans remain a bright spot, representing a less trafficked segment of the market and offering a yield premium of 132 basis points over sponsor-backed deals as of Q2 2025.1
  • For investors, this competitive environment underscores the value of specialized approaches that target less competitive segments of the market to enhance yield and diversification potential.
contributing authors
Christopher Bole
Christopher Bole
Vice President, Financial Writer
footnotes + disclosures
  1. Cliffwater, LLC, as of June 30, 2025.

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